The fragility of unfair terms law on bank charges: towards a complex re-litigation in the UK?

At issue in Abbey National 2 was whether a contract term which allowed the imposition of supplementary bank charges was exempt from assessment for unfairness under the 1993 European Union (EU) Unfair Terms Directive (UTD), a measure of EU law implemented in the UK in the 1999 Unfair Terms in Consumer Contracts Regulations (UTCCR), because it was a ‘core’ or ‘price’ term, or whether it was assessable for fairness as a ‘peripheral’ and/or ‘contingent’ term? Was this, moreover, especially the case where the consumer was subsequently surprised by the extent of the charges imposed? A complex knot of case law in both main UK jurisdictions (England and Wales on the one hand and Scotland on the other) culminated with the ruling in Abbey National, in which the Supreme Court held that terms relating to bank charges were, to a significant (if uncertain) extent, exempt from the assessment of unfairness. Yet Abbey National seems to amplify the inconsistencies within the domestic case law on unfairness and to be at variance with both the UTD and the central tenets of EU consumer policy. This exemplifies the uneven interface between EU and national consumer laws; an interface which increasingly demands clarification. Attempts at reconceptualisation have been initiated: the Department for Business, Innovation and Skills (BIS) promoted a new Consumer Rights Act,3 passed on 26 March 2015,4 while the Law Commissions were asked to clarify the law and address the issue of UTCCR exemption in the wake of Abbey National.